Our hypothesis has been that liver repopulation with parenchymal cells will help develop novel therapies and provide systems for addressing fundamental questions in liver biology. We and others have made significant progress in advancing these goals by identifying permissive conditions for hepatocyte survival and function, methods to increase the mass of transplanted hepatocytes, insights into hepatic gene transfer, and analysis of hepatic progenitor cells. However, more work is necessary before clinical applications of hepatocyte transplantation could be systematically analyzed. We propose a series of studies directed at further defining the safety of liver repopulation by analyzing transplanted cell biodistributions during manipulations to increase liver repopulation, amelioration of deleterious changes in the host liver emanating from cell transplantation, and mechanisms for improving cell engraftment in the normal or the diseased liver. We will begin to isolate and characterize progenitor cells derived from the fetal human liver and to isolate stable cell lines capable of differentiating into hepatocytes. To demonstrate the fate of progenitor human liver cells, we will develop novel genetic animal models, which will allow unequivocal analysis of transplanted cell survival, differentiation and human hepatocytes could be infected with hepatitis viruses to help develop models of disease. These systems will allow us and others to develop effective therapies and to address basic questions concerning mechanisms in hepatitis viral persistence and replication. In parallel bonafide animal models of acute and chronic liver disease in humans. Completion of our proposed studies will greatly advance fundamental knowledge of the ontogeny and differentiation of the liver, therapeutic potential of hepatocyte transplantation, and development of novel biological systems.